Hybrid Electric Vehicle (HEV) Market Size, Share, Growth, And Industry Analysis by Type (Parallel Hybrid Electric Vehicle, Series Hybrid Electric Vehicle) by Application (Commercial, Passenger), Regional Forecast To 2031

Updated On: 01 April 2024

Hybrid Electric Vehicle (HEV) Market Report Overview

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global hybrid electric vehicle (hev) market size was USD 341000.0 million in 2021 and market is projected to touch 2014811.27 Million by 2031, exhibiting a CAGR of 19.44% during the forecast period.

A hybrid electric vehicle (HEV) is a type of vehicle that combines two or more power sources, typically an internal combustion engine (ICE) and an electric motor, to propel the vehicle. HEVs use a battery to power the electric motor, which assists the ICE during acceleration and other times when extra power is needed, such as when climbing a hill. HEVs are designed to be more fuel-efficient and emit fewer pollutants than conventional vehicles. They accomplish this by using the electric motor to power the vehicle at low speeds, when the ICE is less efficient, and by using regenerative braking to recharge the battery. When the ICE is running, it is also used to recharge the battery.

The hybrid electric vehicle (HEV) market size is growing rapidly due to several factors. First and foremost, there is a growing demand for more fuel-efficient and environmentally friendly vehicles as people become more aware of the negative impacts of fossil fuel-powered vehicles on the environment. HEVs are designed to be more fuel-efficient and produce fewer emissions than conventional vehicles, making them an attractive option for eco-conscious consumers. Additionally, governments around the world are implementing regulations and incentives to promote the adoption of low-emission vehicles, including HEVs. In many countries, HEVs are eligible for tax incentives, rebates, and other subsidies, which can make them more affordable for consumers. Advancements in technology have also played a significant role in the growth of the HEV market. Battery technology has improved significantly in recent years, allowing for longer driving ranges and faster charging times. This has helped to address some of the concerns that consumers may have had about the practicality of HEVs compared to conventional vehicles.

COVID-19 Impact: The Pandemic Had A Tremendous Influence On The Market, Posing Both Obstacles And Possibilities For Businesses In This Sector

The COVID-19 pandemic has had a significant impact on the hybrid electric vehicle (HEV) market, as it has on many other industries. In the early stages of the pandemic, many automotive manufacturers were forced to temporarily shut down production facilities, disrupting supply chains and causing significant delays in the production and delivery of vehicles. Additionally, the economic impact of the pandemic has led to reduced demand for new vehicles, including HEVs. Many consumers have been hesitant to make large purchases in the midst of economic uncertainty, leading to a slowdown in vehicle sales. The pandemic has also caused a shift in consumer priorities, with many people prioritizing essential expenses and delaying purchases of non-essential items. Despite these challenges, there have been some positive developments for the HEV market during the pandemic. As people have been driving less due to lockdowns and restrictions, there has been increased interest in vehicles with better fuel efficiency, including HEVs. Additionally, as many governments around the world have implemented stimulus packages to support economic recovery, some of these initiatives have included funding for the development and adoption of low-emission vehicles, including HEVs. 

Latest Trends

"The Growth Of Plug-In Hybrid Electric Cars Is One Trend In The Hybrid Electric Vehicle (HEV) Industry (PHEVs)"

One trend in the hybrid electric vehicle (HEV) market is the development of plug-in hybrid electric vehicles (PHEVs). PHEVs are similar to traditional HEVs in that they have both an electric motor and an internal combustion engine, but they also have a larger battery that can be recharged from an external power source. This allows PHEVs to operate purely on electric power for a certain distance before switching to the ICE. One example of a new product related to this trend is the Toyota RAV4 Prime, a PHEV that was launched in 2020. The RAV4 Prime has an all-electric range of up to 42 miles and a total driving range of over 600 miles. It also boasts impressive performance, with a 0-60 mph acceleration time of under 6 seconds.

Another notable development in the PHEV market is the launch of several luxury PHEVs by leading automakers. For example, the BMW 745e xDrive and the Mercedes-Benz S560e both offer impressive electric-only driving ranges and luxurious features such as heated and ventilated seats and high-end audio systems. Leading players in the HEV market, such as Toyota, Honda, and Ford, have all invested heavily in the development of PHEVs. Toyota, for example, has stated that it aims to have a PHEV version of every model in its lineup by 2025. Other major automakers, such as Volkswagen and General Motors, have also announced plans to significantly increase their production of PHEVs in the coming years. 

Hybrid Electric Vehicle (HEV) Market SEGMENTATION

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• By type

Depending on hybrid electric vehicle (HEV) market given are types: Parallel Hybrid Electric Vehicle, Series Hybrid Electric Vehicle. The Parallel Hybrid Electric Vehicle type will capture the maximum market share through 2031.

• By Application

The market is divided into Commercial, Passenger based on application. The global hybrid electric vehicle (HEV) market  players in cover segment like Commercial will dominate the market share during 2022-2031.

Driving Factors

"The Growing Concern About The Environmental Effect Of Conventional Gasoline-Powered Automobiles Is One Element Fueling The Market's Expansion"

One driving factor behind the hybrid electric vehicle (HEV) market growth is the increasing concern about the environmental impact of traditional gasoline-powered vehicles. HEVs are designed to be more fuel-efficient and produce fewer emissions than conventional vehicles, making them an attractive option for consumers who are looking to reduce their carbon footprint. As the world continues to face environmental challenges such as climate change, more and more people are becoming aware of the need to reduce their impact on the environment. Governments around the world have also recognized the importance of addressing climate change, and many have implemented policies and incentives to promote the adoption of low-emission vehicles, including HEVs. Furthermore, many consumers are willing to pay a premium for eco-friendly products, and HEVs are no exception. In fact, some studies have shown that consumers are willing to pay a premium of up to 15% for a HEV over a conventional vehicle, indicating that the environmental benefits of these vehicles are highly valued by consumers.

"The Expanding Availability Of Charging Infrastructure Is Another Element Fueling The Growth Of The Hybrid Electric Vehicle (HEV) Industry"

Another driving factor behind the hybrid electric vehicle (HEV) market growth is the increasing availability of charging infrastructure. HEVs require both a gasoline-powered engine and an electric motor, but plug-in hybrid electric vehicles (PHEVs) can be charged from an external power source in addition to their gasoline engine. As more and more charging infrastructure is being built, PHEVs are becoming more practical for consumers. This is particularly true in urban areas, where the majority of daily driving can be done on electric power alone. The availability of charging infrastructure makes it possible for PHEV owners to recharge their vehicles at home or at public charging stations, allowing them to reduce their reliance on gasoline and save money on fuel costs. Governments around the world are also playing a key role in driving the growth of the HEV market by investing in charging infrastructure. Many countries have implemented policies and incentives to promote the adoption of low-emission vehicles, including funding for the development of charging infrastructure. For example, the United States has committed over $4 billion in funding for the development of charging infrastructure, while China has set a target of building 500,000 charging stations by 2020.

Restraining Factors

"The Greater Starting Cost Of HEVs Compared To Traditional Gasoline-Powered Vehicles Is One Restraint On The Market's Expansion"

One restraining factor affecting the hybrid electric vehicle (HEV) market growth is the higher initial cost of HEVs compared to conventional gasoline-powered vehicles. HEVs typically require more advanced technology and components, such as larger batteries and electric motors, which can make them more expensive to produce. This higher initial cost can be a barrier for some consumers, especially those who are more price-sensitive. In addition, many consumers may not fully understand the long-term savings they can achieve with HEVs, such as lower fuel costs and potential tax incentives. This lack of understanding can also be a barrier to adoption.

Another factor that can limit the growth of the HEV market is the range anxiety associated with fully electric vehicles. While PHEVs offer the convenience of gasoline backup, fully electric vehicles rely solely on their batteries, which can limit their range and require careful planning for longer trips. This can be a concern for some consumers, particularly those who frequently travel long distances. In addition, the availability of charging infrastructure can also be a restraining factor for the growth of the HEV market. While there has been a significant increase in the development of charging infrastructure, particularly for PHEVs, it can still be challenging for consumers to find convenient and accessible charging stations, particularly in rural areas.

Hybrid Electric Vehicle (HEV) Market Regional Insights

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"Asia Pacific Region Is Expected To Continue Growing At A Rapid Pace In The Coming Years Driven By Increasing Demand For Eco-Friendly Vehicles And Government Policies"

The Asia Pacific region is currently the leading region for the hybrid electric vehicle (HEV) market share and is expected to continue growing at a rapid pace in the coming years. This growth is being driven by several factors, including increasing urbanization, rising income levels, and government incentives and policies aimed at reducing emissions. China is the largest market for HEVs in the Asia Pacific region, accounting for the majority of HEV sales in the region. The Chinese government has implemented policies and incentives to promote the adoption of low-emission vehicles, including HEVs, in order to reduce air pollution and combat climate change. In addition, Chinese consumers are increasingly interested in eco-friendly vehicles, and are willing to pay a premium for HEVs that offer better fuel efficiency and lower emissions. Japan and South Korea are also important markets for HEVs in the Asia Pacific region. Both countries have well-established automotive industries and are home to several leading HEV manufacturers, including Toyota and Hyundai. In addition, both countries have implemented policies and incentives to promote the adoption of HEVs and other low-emission vehicles. 

Europe is the second-leading region for the hybrid electric vehicle (HEV) market share, after the Asia Pacific region. This region has seen significant growth in recent years, driven by factors such as government incentives and regulations aimed at reducing emissions, and increasing consumer interest in eco-friendly vehicles. Several countries in Europe, such as Norway, France, and the United Kingdom, have implemented policies and incentives to promote the adoption of low-emission vehicles, including HEVs. For example, Norway offers tax exemptions and other incentives for buyers of HEVs, while France has announced plans to ban the sale of gasoline and diesel-powered vehicles by 2040. In addition to government policies and incentives, there is also increasing consumer demand for HEVs in Europe. Many consumers are becoming more environmentally conscious and are willing to pay a premium for vehicles that offer better fuel efficiency and lower emissions. This trend is particularly evident in countries such as Germany and the United Kingdom, where there is a high level of awareness of environmental issues. Several leading HEV manufacturers, such as Toyota, Honda, and BMW, have a strong presence in the European market and are continuing to invest in research and development to improve the performance and efficiency of their vehicles.

Key Industry Players

"Key Players Focus on Partnerships to Gain a Competitive Advantage "

Prominent market players are making collaborative efforts by partnering with other companies to stay ahead of the competition. Many companies are also investing in new product launches to expand their product portfolio. Mergers and acquisitions are also among the key strategies used by players to expand their product portfolios.

List of Market Players Profiled

• Honda Motor Company (Japan)
• Delphi (U.K)
• ZF and Schaeffler (Germany)
• Allison Transmission (U.S)
• BorgWarner (U.S)
• Nissan Motor Company Ltd. (Japan)
• Ford Motor Company (U.S)
• Daimler AG (Germany)
• Hyundai Motor Company (South Korea)
• Toyota Motor Corporation (Japan)
• Continental AG (Germany)
• Volvo Cars  (Sweden)

Report Coverage

This research profiles a report with extensive studies that take into description the firms that exist in the market affecting the forecasting period. With detailed studies done, it also offers a comprehensive analysis by inspecting the factors like segmentation, opportunities, industrial developments, trends, growth, size, share, and restraints. This analysis is subject to alteration if the key players and probable analysis of market dynamics change.